Tuesday, October 14, 2008

Is it Time for Comprehensive Health Reform? Revisiting Fuchs and Emanuel

In November of 2005 Victor Fuchs and Ezekiel J. Emanuel published an article in the Journal Health Affairs entitled "Health Care Reform: Why? What? When?
This article has been on my mind of late as our world financial system has been dramtically disrupted and the roles played by government have changed in ways few would have predicted only a few years ago. In 2005, when few would have thought such interventions would be necessary, Fuchs and Emanuel were not optimistic that comprehensive health care reform would be easy to realize. They said that "over the long term, reform is likely to come in response to a major war, depression, or large-scale civil unrest."

Their article is worth revisiting. I will quote one paragraph and summarize earlier points. I urge the readers to go back to Health Affairs and take a look.

The authors described three general scenarios in which comprehensive reform may take place:

Quoting (with formatting changes):

What might set the stage for comprehensive reform of health care?
  • A major war, a depression, or large-scale civil unrest might well set in motion a change in the political climate that would overpower the obstacles that prevail in normal times.
  • A national health crisis, such as a flu pandemic, might also light the fuse of change.
  • Short of a major economic, social,political, or health crisis, there might be a confluence of forces that together would propel the nation toward comprehensive reform over the next decade, such as widespread dissatisfaction of the business community with employer-based insurance; state governments’ inability to sustain the ever-growing fiscal drain of federally mandated, means-tested insurance; or a financial crisis with Medicare. Leadership from the business community and states might together galvanize comprehensive reform.
  • Finally,there might be a growing realization by average Americans that the risks of the current system to them personally and to the country as a whole outweigh the risks of comprehensive reform.
Where do we stand today relative to 2005?
  • We still have a war (or two) - and to some, they are major
  • We have a serious recession and a new push to "bail out" and incur national investments in vital infrastructure issues - finance, and, one predicts, future infusions to state governments, individuals, and perhaps endangered manufacturing sectors. And this will lead to more support for small business.
  • We do have a confluence of forces that will lead to some change.
  • We are experiencing widespread dissatisfaction of the business community with employer-based insurance
  • Current projections suggest that state governments will not be able to sustain the ever-growing fiscal drain of federally mandated, means-tested insurance
  • We do have a financial crisis with Medicare.
  • Average Americans are more driven by fear of losing their health care coverage than they were a few years ago; those who have little recourse have become more vocal; health care costs again are a major source of bankruptcy as was said to be the case in the 60s during the Medicare debate.

The issue isn't whether or not these events are taking place, but the extent to which the public believes that these events compel a serious examination of a more radical system sooner rather than later. As we have seen in financial sectors, the retreat from the "hands off" roll of the federal government has led to a broader interpretation of the term "moral hazard" and issues of fairness are leading many to draw new boundaries between government and private-sector roles. To the extent that a viable and substantive comprehensive new approach must be introduced will, ironically, be advanced by those who traditionally are averse to government intervention and management - until they need it personally. Major manufacturers facing bankruptcy will no doubt look at their health care cost as a drag on their plans for recovery. Small businesses seeking better access to credit may be more amenable to coupling these subsidies with a requirement to provide basic health care coverage for all full-time employees.

In the article, Fuchs and Emanuel provide a brief history lesson. They describe the fragmentation of employer-based health insurance, the disappearance of community-rated premiums, the reality of high administrative costs, and consequences of Medicare's open-ended entitlements. They also provide brief discussions on the implications of health IT, confusion over quality metrics, and disagreements in cost-benefit trade-offs.

The authors summarize both incremental and comprehensive approaches to health care reform and discuss some implications of each approach. Their summary - published shortly after the 2004 elections, seems just as relevant as we approach another election day.

They then list the following incremental reform approaches
  • Employer mandates
  • Subsidies
  • Expanding Medicare and Medicaid programs
  • Health savings accounts
  • Managed competition - including caps on tax-exempt plan expenses
  • Quality incentives

Their comprehensive reform approaches are:
  • Personal mandates and subsidies
  • Single-payer proposals
  • Voucher programs
The overviews help frame the central question: to what extent will the current collapse of the global financial infrastructure change the Nation's appetite for incremental or comprehensive change?

The current financial crisis should not be viewed only as an economic tragedy but perhaps also as a basis upon which we can initiate a meaningful and productive public debate. This writer fears that many of the drivers for comprehensive reform identified by Fuchs and Emanuel are looming. It's time to think about these well-known proposals in the context of our current dilemma.


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